About Staff Turnover

Staff turnover encompasses personnel moves including layoffs, firings and promotions. While the idea of turnover is harrowing for many businesses, the desire for a stable bottom line often trumps relationships with longtime employees. In many cases, staff turnover is limited by union representation and employee contracts. Every manager, supervisor and business owner has to understand the complexities of staff turnover before making the first personnel decision. An incorrect promotion or firing can lead to lost productivity as well as diminished loyalty from employees.

Function

The function of staff turnover is to keep essential personnel in positions best suited to their skills. The promotion, demotion and firing of staff members ensure that every task is being completed as efficiently as possible. Staff turnover may entail consolidating positions and creating new jobs that reflect the new challenges facing a company. On a more practical note, firings and layoffs are used to reduce wages and benefits payments that are diverted elsewhere in the company.

Types

Staff turnover can be broken down into internal and external types. Internal staff turnover involves promoting current employees, adding new responsibilities to job titles and bringing in entry-level employees due to company growth. External turnover means that employees are leaving the company to seek new jobs, raise families or enter retirement. Staff turnover can also be observed in terms of positive and negative influences. While positive turnover involves the creation of new jobs in recognition of a company's expansion, negative turnover demonstrates a contraction of company finances due to hard times.

Size

Positive staff turnover typically takes place on an individual or small group basis. This type of turnover involves individual consultations to inform personnel of their promotions, pay raises and additional responsibilities. These conversations are designed to keep personnel moves confidential while reducing frustration by workers who were not promoted. Negative turnover typically takes place on a larger scale with mass layoffs and firings common in the corporate world. While worker morale takes a hit with sizable layoffs, investors and owners concerned about a company's bottom line may regain confidence with negative staff turnover.

Effects

Whether it is positive or negative turnover, a company will experience some consequences by shifting personnel. A company has to plan promotions and layoffs carefully to reduce impact on daily productivity. Productivity will take a dive as new employees undergo job training and newly promoted personnel learn their job responsibilities. If turnover is done poorly, an employer may begin to notice lower morale among workers from top to bottom. This dip in confidence by employees may come from uncertainty about promotion criteria or concern that additional turnover may be necessary in the future. A business that earns a reputation for turning staff over frequently will find it difficult to recruit entry-level workers and executives alike.

Time Frame

The process of turning over staff can take up to a year for completion depending on depth of the turnover. This time frame begins with discussions by board members and executives about necessary personnel changes. Human resources professionals need time to review contracts and personnel records to determine eligibility for promotion or firing. If the company is promoting employees and creating new positions at the entry level, HR personnel need to recruit applicants and train existing employees for their new positions. Companies engaging in negative staff turnover need to provide sufficient notice to workers, conduct exit interviews and reassign responsibilities to remaining personnel.

Resources

• American Academy of Family Physicians
• Job Openings and Labor Turnover Survey